Here’s five ways Minister Coveney says he’s helped young farmers this year

Responding to parliamentary questions recently the Minister for Agriculture, Simon Coveney outlined some of the key measures he introduced which he says benefited young farmers this year.

Clearly the most important measures included the two key schemes under CAP 2015 Pillar 1.

The measures provided through the ‘young farmer’ priority category of the National Reserve and also the Young Farmers Scheme are designed to encourage and facilitate the entrance of young, well-educated persons into our farming community.

Minister Coveney has said that the implementation of these measures has the potential to play a major role in the regeneration of agriculture in Ireland and will provide a solid basis for the industry in the coming years.

1. National Reserve

Successful young farmer applicants to the National Reserve will receive an allocation of new entitlements on the basis of one entitlement for one hectare.

Applicants who already hold existing entitlements which are below the national average value will receive a top-up whereby the value of those entitlements will be increased to the national average value.

The National Reserve fund in 2015 is based on 3% of the Basic Payment Scheme financial ceiling, which is estimated at providing approximately €24m in funding.

Some 6,000 farmers applied under the Young Farmer category of the National Reserve and payments are currently being issued.

3. Young Farmers Scheme

Under the Young Farmers Scheme, young farmers will receive the payment under the scheme for a maximum period of five years.

The ‘five years’ is dated from the year of setting up of the holding in his/her own name. The Young Farmers Scheme payment will be made on a maximum of 50 entitlements.

Minister Coveney said he opted to use the maximum financing rate of 2% for the Young Farmers Scheme. Funding of €24m is available under the scheme for 2015 and the same financing rate will be applied for the years 2016 to 2019.

“I have selected the method of calculation which will give the maximum payment possible,” he said.

The payment will be calculated as 25% of the national average payment per hectare which is estimated will give a payment of approximately €66 per entitlement held by the young farmer.

Some 8,500 farmers applied under the Young Farmer Scheme and payments to eligible applicants are currently being issued.

3. Farm Building grants

Minister Coveney also highlighted that he established a dedicated capital investment scheme for young farmers under TAMS II.

The Scheme offers a wider range of investment items than is generally available, and with an enhanced rate of aid of 60% as compared with the standard 40% grant.

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A similar dedicated investment scheme is available for Organic farmers, with a range of items specific to organic production, and again offering a 60% rate of aid for young farmers.

For any young farmers who do not meet the eligibility requirements for these dedicated schemes, the Minister says he has ensured that their applications will be prioritised under the mainstream TAMS schemes, which are open to all.

4. Dairy Sector support

Last September Minister Coveney said he presented a six point plan, to both the EU Commissioner and my EU ministerial colleagues, to address the particularly acute situation in the dairy sector.

“I was extremely pleased that the final decision at Council took account of Ireland’s requests and included the provision of targeted direct aid for dairy farmers, which can be matched nationally,” he said.

The aid comprises €13.7m of EU funding and a further €13.7m in matching national funding.

The payment will be made on a flat rate basis with each of the 18,000 dairy farmers in the country receiving approximately €1,350, with an additional €800 top-up for young dairy farmers.

The flat rate payment will be made in the coming weeks and the young farmers’ top-up payment will be made in early 2016 when that scheme is finalised.

5. Taxation

The Agri-taxation Review published as part of Budget 2015, and set out the main policy objectives for continuing support through agri-taxation measures including increasing land mobility and the productive use of land and assisting succession and the transfer of farms, according to the Minister.

“Both objectives are especially relevant to young farmers,” he said.

Budget 2016

Minister Coveney said Budget 2016 continued the implementation of the Agri-taxation Review and a major new initiative on ‘Family Transfer Partnerships’ to assist succession was announced.

It is a structure in which family members enter into a partnership, and appropriate profit-sharing agreement, with the provision for the transfer of the family farm to the younger farmer at the end of a specified period (not exceeding ten years).

To support this transfer a tax credit of up to a maximum of €5,000 per annum for five years can be allocated to the partnership, thereby incentivising the transfer and mitigating some of the financial concerns involved.

The partnership model enables a gradual transfer of control and also facilitates knowledge transfer from one generation to another.

In addition two measures specifically aimed at young farmers were renewed for a further three years – the 100% Stock Relief on Income Tax for Certain Young Trained Farmers and the Stamp Duty Exemption on Transfers of Land to Young Trained Farmers. These changes are subject to EU State Aid approval.

These changes are subject to EU State Aid approval, the Minister said.